WORKING ABROAD / SEP. 13, 2013
version 3, draft 3

Royal Mail Privatization: Is Industrial Peace at Stake?

In light of the unprecedented British Government’s decision to privatize the nation’s postal service within six weeks, the fear of destabilizing the company’s operation is very alive. Apart from this, the relationship between employees, trade unions and the employer is at risk, if the stakeholders cannot reach a common ground for sorting out the issue of privatizing Royal Mail.

While the Government claims that the flotation of the company is necessary in making Royal Mail more competitive, Unions oppose to privatization invoking the vested interests of Government officials. 

The flotation of Royal Mail involves the sale of a major part of the company. According to state officials, this action is essential for drawing funds that will secure the future of Britain’s national postal service. The privatization plan also involves certain benefits for Royal Mail’s staff. Employees will be entitled to free shares worth 10pc of the business. They can also top up their stake provided that they spend at least £500.

On the contrary, the Communication Workers Union (CWU) responds to this plan with the preparation of a nationwide postal strike. In the Union’s point of view, the privatization will not serve the interests of Royal Mail, but the vested interests of government ministers and rich business tycoons who can buy up shares for their own benefit. Besides, privatization would negatively affect the current conditions of employment as employees will lose their “public sector” employment status. This means that the employment laws which govern public sector workplaces, will no longer be upheld. Instead, the organization will be open to initiating new employment contracts that better suit the business! 

Additionally, there are fears that flotation could lead to inflation. This is why Unions respond to this measure with strikes. But industrial actions should be avoided, as they will only undermine the teamwork, productivity and profitability of the organization.

Apparently, the arguments of the two sides are significantly contradictory. There is a different understanding of what is considered as “good” for the company. What is currently crucial though - regardless of whether the company will become private or not – is the maintenance of industrial peace by all stakeholders involved, that is the employees, the Union, the employer and the customers. All parties should attempt to constructively resolve conflict by engaging in a mutual dialogue, with a respectful attitude.

 

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